THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, CNN ANCHOR: They've just taken a break for lunch. The members of the health care summit over at Blair House. You see the room. Everyone has gotten up. The president has left the room. They'll resume this session at 1:45 p.m. Eastern, about 45 minutes or so from now. Welcome back to our continuing coverage.

One of the things that the president noted is that there is a vote on the House of Representatives floor right now, so the members of the House of Representatives had to get back. They're rushing back to Capitol Hill to vote. They should be back by 1:45 p.m. Eastern to resume this health care summit.

We want to assess what we've heard. They're supposedly half way through, although, John King, I suspect this 4:00 deadline that they're supposed to resolve it by is going to come and go.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: It's not the first event in Washington history full of politicians that has run off schedule, Wolf. But it's a fascinating discussion. There's a lot of substance, and it's very interesting. And if you care about health care, you can learn some things by listening to this today.

As David noted earlier, sharp philosophical differences. They're not negotiating. These are presentations. Each side is presenting its points and going through --

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Hold on a second, in terms of how much agreement should be involved -- you know, the argument that Republicans are making really isn't that this is a government takeover of health care, but rather, that we're insuring the -- or we're regulating the insurance market too much. And, you know, that's a legitimate philosophical disagreement. We'll hopefully be able to explore it a little more in the afternoon.

BLITZER: All right. As he walked back to the West Wing of the White House -- he's going to have lunch not at Blair House. He's gone back to the White House for lunch.

KING: It's interesting he could stop there. It's his choice. He can answer questions. Wolf, you've seen presidents can stop or they can keep on going. He wants to be part of this running commentary throughout the day. It's happening on all the political blogs. It's happening here with us. It's happening all over the social networks. And he's trying to take the edge off right there. The Republicans want to call it a government takeover. They seem to be admitting in that room, it's not a takeover, it seems to be a disagreement about how much regulation.

So he's trying to sand the edges there of the sharpest Republican arguments there. Even just walking back to the White House for a quick meal, he's not resisting the opportunity to get in one more presentation.

BLITZER: Because he -- and as we've been saying, the body language that he's showing is one of frustration and irritation.

CANDY CROWLEY, CNN SENIOR CONGRESSIONAL CORRESPONDENT: He has seemed, at times, irritated, but he's, you know -- he's given everybody -- each side a chance and everybody's getting their points across. If you want to know why the two sides are unable to come to an agreement, you will learn that today. We have learned that today. If you're watching this waiting for them to say, oh, good, let's put that in, you're not going to get that.

And the problem is, it's a great discussion, but I judge the -- if the president had had this discussion nine months ago, it would have been more effective than having it now, particularly since they come out of here and say we can't come to an agreement -- they are going to have to pass it no matter what.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Which gets to their political strategy, which is they believe -- the Democrats believe it's very good for you to hear the president saying we agree on this, this, this, and this with Republicans, because then, when the Democrats go back to Congress and decide to push their bill through, through the budget process, with the majority vote, if they can get it, in both houses, they can say, we tried to incorporate -- we incorporated the things we agreed on, and they still didn't vote for it. And then they pass it, and then they move on to jobs.

BLITZER: One thing, Joe, the president keeps trying to do, not necessarily with a whole lot of success, at least in the first few hours of this -- he keep saying, well, there's a lot we agree on? Let's work on those things that we agree on and go from there. He cited that, at one point, everybody agrees you can't drop people from their insurance policies; increase the age limit for dependents from 21 to 25 or 26; have no annual or lifetime limits on health insurance; and if you have a preexisting condition, you can still get insurance. He says, we all agree on that; why can't we just resolve it?

JOE JOHNS, CNN SENIOR CORRESPONDENT: Right. And there's some other things, too. Tort reform is something else that the administration has sort of flirted with with the Republicans. The Republicans, of course, continue with -- with a very clear message, if you will. I mean, the message is, Mr. President, scrap what you've got here, because it's just not going to work for us, and let's try piecemeal with some of those ideas you talked about.

The Democrats, on the other side, the president himself, saying, hey, piecemeal isn't good enough right now. We can't afford to just take one idea or two ideas. We need the whole shebang. That's what they're working on all day long and they may not get anywhere with it. BLITZER: He's need some help on some of the substantive issues. He's making a good case, the president, but he doesn't seem to have a lot of backup support on the expertise, if you will, on some of these technical issues.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I'm surprised. I know the Democrats went in thinking, we'll just keep giving the ball to Obama, and he'll run ball down the field, as he did in Baltimore. That was sort of the game plan going in, that we won't say very much. But he clearly should get reinforcements in order to even this thing out.

I would think, going back to the Oval Office right now, they are sitting there saying do we need -- this is like halftime, and going into the locker room, and do you need to change your game plan. Don't you think they sort of need to think about that now?

BORGER: The Republicans knew what happened in Baltimore. They got smoked, right? So, here, this time they came in with a plan. They mapped it out. They met and decided what they were going to do, who was going to do it, start out with Lamar Alexander --

BLITZER: And Tom Coburn, himself a physician, he did a very strong job as well.

KING: To David's point, the president who has been handling -- has been carrying the ball just about every play -- the vice president jumped in at one point a little bit more. But he's boxed in a little bit, in the sense that the Democrats have decided that to bend the cost curve, to do some of the other access things they need to do, you need the sweeping, comprehensive bill.

So in the room there, he could change the terms of debate by saying, OK, I will break it into pieces. And there are some at the White House that would have been the preferred approach at the beginning, to build goodwill, but then they add the big, glaring, huge flashing light, which is you can't deal with the costs. As Candy said, the knee bone is connected to the thigh bone. You can't bend that cost curve unless you deal with those issues.

They think, if they do preexisting conditions and they do some accessibility, maybe the tort reform, and then they say, OK, now we have to do the hard part, the costs, then Republicans will say, no way. So they say it has to stay in one big bill. So it's hard to negotiate when you won't give up your main strategy, which is it has to be big.

BORGER: And there's a danger that all the Democrats don't agree either. Right, so if they start talking, George Miller may disagree with another Democrat from the senate, and -- with Max Baucus, for example, and that could be a bit of a problem. GERGEN: There's something symbolic that's going here, too -- and you know this, Wolf. Everybody here knows this -- is when you're working with the president, you want him to sort of be above things, you know, maintain the status of the presidency, the sort of the almost regal nature of it in some ways. And when you put him at a table like this, and sit him just -- he's with everybody else -- it diminishes his authority. And suddenly, Eric Cantor is taking on the president of the United States, a member of the minority party in the House of Representatives going toe to toe with the president. That is not good news for a president.

CROWLEY: I'll tell you, though, I think that one of the things the president has done very effectively -- and let's remember the larger audience, OK? So beyond the substance, what does the president needs? He needs -- what do independents hate? They hate it when people bicker. They hate it when they get so political. Every time a point comes up -- how many times has he said, well, we've got to get beyond the politics of this. That's a big neon sign" they're being political, I'm trying to agree on something.

BORGER: We agree on this.

CROWLEY: We agree on this. He knows the knee bone is connected to the thigh bone.

BLITZER: When he rebuked John McCain and he said, we're not campaigning anymore, you could see the sparks in that room.

CROWLEY: Yes.

BLITZER: All right, John, make your quick point.

KING: I was going to quickly set the table on what the American people thought coming in to this. To Candy's point, I show a poll real quick. We asked people, to set up this summit, what should congress do? Pass the current bill, 25 percent, work on a new bill, 48 percent, stop working on health care, 25 percent.

So, there is a consensus in the country that health care reform is important. They just -- to David's point, you have 50 different states give you 50 different groups of politicians, and they just think differently because they have to go home and face those voters. And putting the pieces of the puzzle together politically, and from a policy perspective, is what we're seeing today. It's very hard.

BORGER: There are honest differences. I think that's what the president is saying in this debate.

(CROSSTALK)

BORGER: People honestly disagree.

BLITZER: On substantive issues. Dana Bash and Ed Henry are watching this. They're our reporters on the front line of this health care debate.

Ed Henry, first to you. This is halftime, if you will, on this day. The president has gone back to the West Wing. I assume he's huddling with his top advisors, what to do in part two. What are you see? What are you hearing?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: It's interesting, when you talk about halftime, as David Gergen was talking about, John King was talking about, whether they could break up the bill into different pieces. You had that story in "the Wall Street Journal" this morning suggesting that this administration has a Plan B in reserve.

And I've talked to senior officials this morning who say they do have such a bill, a much more scaled-back bill, would cover maybe about 15 million people, instead of 30 million more people. But they don't want to sort of break the glass on that just yet. And that's why the president has not put it out there in this session, at least in the first couple of hours, because then they feel like they'd lose all of their leverage, they say privately, that they got to continue to push for this comprehensive bill.

And so, as a result, what you're seeing with the sort of public display is a lot of same arguments on each side, and no real breakthrough, because the president hasn't changed his tack and neither have the Republicans. I think the only real fireworks we saw was John McCain stepping in and kind of tweaking the president on what he believes to be a lack of transparency earlier in this process, some of the back-room deals that were cut. And you could see the president getting frustrated and saying, look, the campaign is over; the election is over. And John McCain saying, I'm fully aware of that; I'm reminded of that every day -- Wolf.

BLITZER: Dana Bash up on Capitol Hill, if the president and the White House, they come up with a dramatically scaled-back version, how irritated will those liberal Democrats be? They want a very robust plan.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: They're already irritated. They're irritated quite frequently when it comes to this issue, because they already feel like they're not getting their voices heard, at least the progressives in the president's party. But, on that point, I just want to go back to what seems like a very long time ago, the beginning of this summit, and the exchange that Lamar Alexander had, talking about the fact that -- at least trying to get the president to promise not to use that budget process called reconciliation to -- the parliamentary shortcut to get the bill through without Republicans. And then Harry Reid shot back a bit later, we're not even doing that.

It's a bit of a reality check. It's true that nobody has admitted it in public on the Democratic side, but we know from talking to Democratic sources, everybody admits that's very much the tentative plan, that although they are there talking to Republicans and they are exchanging ideas, at least making their ideas heard, the plan is to try to get the Democrats' bill through, without Republicans.

And, second, just a very quick point about the dynamics. David and others were talking about the fact that the president's out there on their own there -- on his own there. Remember, the Republicans want to have a discussion with the Democrats, but it has been the president's fellow Democrats. They have desperate for him to get more involved. Democrats here in Congress really felt like they were on his own. So, in a way, they are probably sitting back and breathing a sigh of relief that, from their perspective, finally the president is taking control of this very important debate.

BLITZER: Very quickly, Dana, is it a foregone conclusion that the Democrats in the Senate pass this reconciliation version, 51 votes, that Nancy Pelosi will have enough Democrats in the House to pass it?

BASH: It's not. And that's one of the many reasons why this tentative plan is very, very tricky, and it has a lot of potholes in it. Not only is it unclear whether or not they can technically do this reconciliation plan -- they're looking in to it -- the problem is, in the House, the original Democratic bill didn't pass by very many votes.

You already have several vacancies and you already have members of Congress, even the Republican you talked to -- the one Republican who voted for it earlier last year -- he's saying that they won't have his vote. So, it's not -- it's not a done deal, not a guarantee, but that is a tentative plan for both sides of Congress.

BLITZER: All right, I want everybody to stand by. We're going to continue our coverage. This is an historic day here in Washington, the health care summit, at Blair House, across the street from the White House. They're in a break right now. We'll be in a break for a couple minutes. Our coverage continues after this.

(COMMERCIAL BREAK)

BLITZER: We're back covering the health care summit at Blair House, across the street from the White House. They've taken a break for lunch. Some members of the House have actually gone back to the floor of the House of Representatives. There's a vote under way. They are supposed to resume the discussion at 1:45 pm Eastern, about a half hour from now. We'll see how on schedule they will be.

We've been checking the facts. Ali Velshi is over at the CNN Fact Check for us. Ali, listen to this exchange that the president had earlier with Lamar Alexander, the Republican senator from Tennessee.

(BEGIN VIDEO CLIP)

OBAMA: So, Lamar, when you mentioned earlier that you said that premiums go up, that's just not the case, according to the Congressional Budget Office.

SEN. LAMAR ALEXANDER (R-TN), CHAIRMAN, SENATE REPUBLICAN CONFERENCE: Mr. President, if you're going to contradict me, I ought to have a chance to -- the Congressional Budget Office report says that premiums will rise in the individual market --

OBAMA: No.

ALEXANDER: -- as a result of the senate bill. OBAMA: No, no, no. Let me -- and this is an example of where we need to get our facts straight.

ALEXANDER: That's my point.

OBAMA: Well, exactly. So, let me respond to what you just said, Lamar, because it's not factually accurate.

(END VIDEO CLIP)

BLITZER: All right, let's see what is factually accurate. What are you finding out?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: All right, we've been checking this out on the Fact Check Desk. Get this, Wolf, they are both kind of right, but this one goes to the president. He's more right than Senator Alexander.

Here's why -- the Congressional Budget Office has said that if the Senate's plan -- that's the one we're looking at right now -- if the Senate's plan is implemented, then rates for premiums in the year 2016 will be 10 to 13 percent higher than they are if the plan wasn't implemented. So, that is where Lamar Alexander is right. The CBO, which is an independent -- independent of the political party, says the rates will go up.

But here's the reality, 57 percent of those insured will see a government subsidy, which will bring the average premium down, actually. It would be -- it would drive average premiums down seven to 10 percent. But this is all based on assumptions. What a lot of people will do because they are under-insured is they will take the savings and apply it to other value in health care. They might, most likely, buy insurance that has more coverage.

So, in fact, the premiums will go up because the offerings will be better. That is the assumption by the Congressional Budget Office, which says that premiums will be higher as a result by 10 to 13 percent. But as the president implied, it's going to be because people will have an ability to buy more. So, it's not an apples-to- apples comparison. Premiums may be up in 2016, if the Senate bill gets passed, but people will get more health coverage as a result of it.

BLITZER: All right, well, let me bring in David Gergen. You were listening to Ali very carefully. And just for our viewers to know, the Congressional Budget Office is this non-partisan body that both the Republicans and Democrats look to as sort of a fair referee who can give us the actual statistics.

GERGEN: Yes, well, I wanted to ask Ali a question, because what I understood him to say was that the premiums will go 10 to 13 percent, but 57 percent of the people will get subsidies from government. And, therefore, the overall average comes down. But is it, then, remain true, Ali, that the 43 percent that do not get government subsidies, do not get government help, that they will receive significantly higher premiums? Is that what your numbers suggest?

VELSHI: There's a lot of number crunching here. Here's the thing, the premiums will be higher, on average, with more components in the insurance. So, the bottom line is 57 percent of individual insurance customers -- this is how the CBO says it -- will -- will get discounts, which will bring down average premiums by seven to 10 percent.

GERGEN: What about the other 43 percent who don't get government help?

VELSHI: That's a good question. I'll dig into that, David. We'll examine more specifically what the 43 percent will face, if the Senate law goes into effect.

BORGER: And the White House would say, of course, that if you don't get help, your premiums are going to go up anyway, if we don't get health care reform.

BLITZER: If nothing is done.

BORGER: If nothing is done, as has occurred recently.

BLITZER: Let's bring in Donna Brazile and Ben Stein, because I want them to weigh in. First to you, Ben. This whole issue of costs, premiums going up, a trillion dollars in extra cost to US taxpayers. Some of it might be offset by some cuts in projected Medicare spending. Where do you come down on this?

BEN STEIN, ECONOMIST: Well, the 57 percent who are going to get subsidies, where is that money going to come from? That money is going to come from taxpayers. That money is not going to just magically appear. So the costs for everyone is going to go up.

Obviously, the insurance companies are going to cover more people, cover people with preexisting conditions, cover people who have very expensive treatment options involved, without having to charge more to somebody. So, somebody's going to be paying more.

I'm also sort of floored by the whole thing that's going on here, where the president is calling the senators by their first names, as if they were kids in a third grade class. And they're all calling him Mr. President.

But I'm most floored of all by the fact that we've got a very serious jolt about the economy today, and somehow they're talking about rearranging the deck chairs on the Titanic when it looks seriously as if the economy is now heading for a double dip in the recession. The whole thing just has a kind of surrealistic quality.

BLITZER: What was the jolt on the economic numbers that you're referring to? STEIN: The jobless -- the first-time jobless claims came in considerably higher than was forecast, high enough to make people think that the recovery is faltering. They were expecting 455,000, came in roughly 495,000, very roughly, very roughly. That's a very bad piece of news. Housing sales declined very sharply in the last month, from the month before. This recovery is not getting the traction that it needs. And for us to be fixating on economic issues about health care that are going to be happening in 2016 when the economy is floundering right now puzzles me.

BLITZER: What about that, Donna?

DONNA BRAZILE, CNN POLITICAL ANALYST: Well, rising health care costs is the single largest problem facing our long-term budget outlook. So I think we have think we have to do both. We cannot just put one egg in one basket and expect the other eggs to just sit there and simmer.

It's important to understand what the president is trying to accomplish today. He's there to listen to the Republicans, to listen to their ideas, to see if he can come up with a package of proposals that will go to the heart of the problem facing our health care industry: the rising costs. And we all know that health care costs is rising across the country.

I'm here in California, and that's all people are talking about on the radio this morning. It also goes to the heart of whether the insurance companies will eliminate these preexisting conditions, and to give women the same benefits that they give to men for the same costs.

So there are a lot of issues that I think the president is trying to accomplish today. And I think the important thing is that people understand that the focus today is not to figure out what the legislative vehicle will look like two days from now, two weeks from now, but what can they achieve by talking to each other and listening to each other.

BLITZER: All right, hold on, guys, for a moment. I'm going to take a break. But I want Roland Martin, who is with us as well, to weigh in. So far what you've seen, Roland -- if these were sort of the Winter Olympic Games, how would you score this?

ROLAND MARTIN, CNN POLITICAL ANALYST: I wouldn't score it. I think that's part of the problem. I think people in DC are spending too much time scoring this. The average person at home is saying, I have listened to both of you, both parties, fight back and forth for 15 months, and finally I get to see the two of you sit down and you hash it out back and forth. The scoring is irrelevant. The conversation and them talking is what's more important.

BLITZER: Hold on a second, Ali Velshi, I think you have a response to the question David asked you, David Gergen.

VELSHI: Yes, in fact, Lisa Desjardins from CNN and, of course, Dana Bash have done some work on this question. I want to bring a clarification to you. The 57 percent of people who would see their premiums go down dramatically because of government subsidies would be 57 percent of people who are individually insured, not 57 percent of everybody whose insured.

In fact, if you are one of the largely insured by a corporate plan or a work plan, the reality is that the CBO, the Congressional Budget Office, estimates that if the Senate plan goes into place, most people would see their premiums decrease or stay the same. So, the worst off are those 47 percent of the individually insured, people who are not part of a larger plan, who will see their premiums go up.

So, the reality is, the 57/43 is actually a division of people who are insured individually, not people who are part of larger plans. The Congressional Budget Office said that under the plan, most people will see their premiums decrease or stay the same. So I said earlier it was a split decision between the president and Senator Lamar Alexander. This new information brings it puts it further into the president's corner.

GERGEN: I don't quite understand why it puts it into the president's corner. Ali, what I think you're saying is about 20 percent of the market in insurance is either individually bought or bought by small businesses.

VELSHI: Right.

GERGEN: And that group of the market is going to see an increase. And that's what Lamar Alexander's been saying. That group is going to see an increase. It's true that 57 percent of that group --

VELSHI: That market.

GERGEN: -- will See a decrease because of government spending.

VELSHI: Right.

GERGEN: But the rest of it, 43 percent of that piece of it, which is, after all, 10 percent, of the market, is --

VELSHI: Forty three percent, you're right.

GERGEN: -- will face pretty sharply increased premiums. That's the point Lamar Alexander was trying to make. I don't see -- it seems to me it's a split decision, but I don't see why it's split in the president's favor.

VELSHI: Your numbers are almost right on. The proportion of the insurance market that gets their plan not through a group plan, a work plan, is about 17 percent. So you're talking about individuals and small businesses. And we're talking about 53 percent of that 17 percent getting government subsidies.

So, the number that would see an increase would be 43 percent of that 17 percent. I guess my point is that the overwhelmingly majority of Americans, according to the CBO, would see their plan stay the same or decrease. That's what I'm saying edges it toward the president.

BLITZER: All right, guys, hold on for a moment, because we're continuing all of our fact checking. All of the facts that were asserted out there, are they real, are they not so real? The president did ask Lamar Alexander to get back to him with some more specific information. They're going to hash it out when this discussion resumes. We expect it to resume in about 20 minutes or so from now, at Blair House, across the street from the White House. We'll speak with one of the participants in that meeting when we come back.

(COMMERCIAL BREAK)

BLITZER: We're continuing our coverage of the historic health care summit at Blair House, across the street from the White House. They're in a break right now from lunch. Some House members had to go vote on the House floor as well. But one of the participants, Republican Senator John Barrasso, Republican from Wyoming, is kind enough to join us from the north lawn of the White House. Senator Barrasso himself is a physician.

It's been a pretty substantive discussion so far. I'll ask you the question the president keeps asking the Republicans: are there areas where the two sides agree?

SEN. JOHN BARRASSO (R), WYOMING: I think there are some, Wolf, and we heard some of those today. We heard if you have insurance, they shouldn't be able to drop you, number one. Number two, they said there shouldn't be lifetime limits on the amount of money if you get sick, a catastrophic injury or illness. And number three is, for young people on their parents' coverage, they should be able to extend that until the age of 25 or 26.

I would say, OK, I agree, let's pass those things into law tomorrow. Let the president sign it into law tomorrow. On the things that we absolutely agree, get those done right now.

BLITZER: I assume when this session resumes, and you have a chance to speak, you'll make that point to the president?

BARRASSO: Well, I have some other points I want to make as a result of my 25 years of practicing medicine in Wyoming, the things that I've seen as a physician and as a chief of staff of the largest hospital in our state. And, you know, my wife's a breast cancer survivor, so we've seen it from all the different sides.

And I think this overall, massive health care bill, it's going to, you know, raise taxes and cut Medicare and -- and I think it's going to cause people's insurance premiums to go up. So, I have lots of problems with the overlying bill, but when we get to the areas where we agree, we ought to get it done and pass it into law.

BLITZER: Senator, John King is here and has a question.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Senator, nice to see you. Let me ask you a question. If you do the three or four things that you just mentioned, you could get 80 votes on the Senate on pre-existing conditions, can't drop you and things like that. Would any of the pieces of the legislation, the incremental steps, deal with the fundamental question, which cripples and paralyzes Washington, which is the growing federal burden, the cost burden. And would any of those actually bend the cost curve that the President talks about all the time as such a threat to fiscal stability in Washington?

BARRASSO: The things that would bend the cost curve are different. Those are allowing people to buy insurance across state lines, it's giving people individual incentives to stay healthy and get their own cost of care down and let them share in the benefits. It's letting small groups deal together and dealing with the abusive lawsuits that every doctor knows the expense of that, not just from their own malpractice insurance but also from the unnecessary tests.

And we talked a lot about waste in the system today and how we need to get the costs down. That's number one thing. But I think anything that we come out of here today with, with an agreement, and there are some areas, they ought to just pass that immediately. Why wait?

BLIZTER: Gloria borger?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Senator, thank you. Would any of that, though, really help people's insurance premiums and help it to go down?

BARRASSO: Well, I think it would. Specifically the extending coverage for people that are young people who -- who now have to go off their parents' insurance policy at about 22, and then they have to go and fend for themselves. And depending on what state they're in, it can be very expensive or not so expensive, depending if they have different mandates within the states. So, you know, Maine is three times as expensive for that young person as the same young person if they lived in New Hampshire, across the border.

So, there are huge differences, and it would make a big difference in the lives of those young people and those families who have children, getting out of college, starting out in the workforce, who need insurance, who ought to be covered because you never know what's going to happen, but -- but right now are kicked off of their parents' policies.

BLITZER: Senator, David Gergen has a quick question.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Senator, your colleague, Lamar Alexander, asked the president for a pledge to take reconciliation off the table. If reconciliation is taken off the table, are the Republicans prepared today to make a pledge that they will work in good faith to get a smaller bill done in the next five weeks or so? Could you -- could you appoint a team, and would you make a pledge today to do that and work with the president?

BARRASSO: I'd love to see that. I would love to see that happen. We need health care reform in this country. We need to focus on quality care, which we have, available care, which is most places, and then affordability. And the thing that I hear about in town hall meetings all across -- and I've had them in many different -- in different states and all around Wyoming, it's the cost of care.

People are happy with the quality. They're happy with it, it's available, but I tell you, the cost is killing people. So, that's what we need to focus on. So, I'd love to have a smaller bill to focus on the things we agree on and get the cost of care down and there's a lot of things we can do.

BLITZER: All right. Senator Barrasso, I know you have go back to Blair House. So, walk across the street. We'll be watching what you say inside. We'll be watching what everyone says inside. We've got cameras in there, which is historic and good. Thanks very much for joining us.

BARRASSO: Thirteen months too late on the cameras, Wolf.

BLITZER: All right. Well, they're there now, so we're taking full advantage of the cameras, Senator. Thanks very much.

BARRASSO: Thank you.

BLITZER: All right, there was an exchange near the end of this first round of conversation, involving the president and his rival for the presidency, John McCain. And we'll play this clip.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Now, both of us during the campaign, promised change in Washington. In fact, eight times you said that negotiations on health care reform would be conducted with the C-SPAN cameras. I'm glad more than a year later that they are here. Unfortunately, this product was not produced in that fashion. It was produced behind closed doors. It was produced with unsavory -- I say that with respect -- dealmaking.

(END VIDEO CLIP)

BLITZER: And then the president had his chance to respond to Senator McCain.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Let me just make this point, John, because we're not campaigning anymore. The election's over.

MCCAIN: I -- I -- I am reminded of that every day.

(LAUGHTER)

OBAMA: Well, yes. So, the -- we can spend the remainder of the time with our respective talking points going back and forth. We were supposed to be talking about insurance.

(END VIDEO CLIP)

BLITZER: All right. So, that was a little testy exchange there between the president and senator McCain. Donna Brazile and Ben Stein were watching.

Ben Stein, first to you. The president, you know, he's fighting right back in the face of some strong Republican comments.

BEN STEIN, ECONOMIC COMMENTATOR: Well, I think he's been fighting from the first moment this thing started. I think the idea that it was a bipartisan kumbaya feel-good moment was thrown out right away, as soon as he started and as soon as Senator Reid started and as soon as Speaker Pelosi started, they started with a series of attacks. And the Republicans have come right back with a series of their own attacks.

I will say, however, that I am sometimes moved to tears that in the fact that this great, great country, the greatest country in the world, people do by in large get along quite civilly. But if I may respectfully say so, I think the president could lose some of his condescension towards the people who are not agreeing with him, and nobody would be harmed.

BLITZER: What do you think, Donna?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well, I disagree. Maybe Ben didn't see the opening remarks. I thought that the opening remarks...

STEIN: I did see them.

BRAZILE: I thought it was a very civil forum. The president spoke, and then he turned it over to the Republican leadership, and they -- and they delegated the former governor, and now senator Lamar Alexander to make opening statements.

And then you saw the -- the speaker of the House and the majority leader put forward the proposals, Ben, that quite frankly, have been vetted for months. We've known for months, we've argued for months what's in the Democratic proposal. Today, once again, is an opportunity to hear from the Republicans what's in their proposal, and to find common ground and commonsense solutions.

So, I don't believe the president's being condescending at all. I think he's trying to listen. He's trying to get some ideas on how to move the process forward.

We're at an impasse. But the ball is on the third yard line, it's time to take it over the top, and that's what the president is trying to figure out.

BLITZER: Hold on a moment. I just want Joe to respond to an interesting exchange that David Gergen had with Senator Barrasso, if he said the president takes the 51-vote procedural reconciliation, as it's called off the table, will the Republicans vote with him for a scaled-back, dramatically reduced health care package. And Barrasso said, yes, we'd love to do that. But would the Democrats love to do that?

JOE JOHNS, CNN SENIOR CORRESPONDENT: Well, yes. You know, in law school they teach -- they actually teach that CNN is the place where negotiations occur between -- between statesmen and politicians and others.

But, yes, so that's a possibility for this administration. They have to know that moving on reconciliation could be perceived as very unpopular, because there's a mood out there that questions the process in Washington, D.C. And if the Republicans were able to effectively sort of create a message that said, hey, they did something really wrong here and it was underhanded or whatever, that might be something --

BLITZER: Because the Republicans, Roland, make the point that, yes, they've used reconciliation on previous occasions, but not on something as historic, as wide scale as this.

ROLAND MARTIN, CNN POLITICAL ANALYST: That's what we call a butt dance where I'm from, where you sit in your chair and you start squirming there, and you want to make up stuff.

Look at the filibuster. It was supposed to be used in extraordinary circumstances, and now you slap it on anything. OK, Democrats complain about reconciliation. When they're in the minority, the Republicans complain about it. The Republicans didn't care about what the American people thought when they used it on the 17 times under the Republican president.

Now, you can sit here, like it or not, is it a rule? Yes. Can they use it? Yes. Is it legal? Yes.

BORGER: Will they be able to get Democrats?

MARTIN: But, again, but the point is --

BORGER: No. Maybe not.

MARTIN: We can stand here and talk about, again, like it or not -- bottom line is, they can use it and so this whole notion of Republicans -- the American people are going to be upset about it, come on.

KING: One thing we haven't mentioned today, Ben brought it up a little bit that we should bring up, the fundamental driving force in the election year is the economy. In a country with 10 percent unemployment, that's what people are mad about. That does not bode well for the party in power, and it's for the president and the Democrats. So, he needs his base in a tough political year, and he angers them by going to a very small health care bill, he will have a political problem, even if he gets a policy victory.

BLITZER: We'll take a break, and we'll resume our coverage on the other side. They should be resuming the discussion in a few moments. They said 1:45 p.m. Eastern, we'll see what's going on.

Also we'll check in at the CNN Center to get some other news, some headlines, from around the world.

(COMMERCIAL BREAK)

FREDRICKA WHITFIELD, CNN ANCHOR: Time for your CNN NEWSROOM reset. We'll get back to Wolf Blitzer and the Best Political Team on Television in a moment. I'm Fredricka Whitfield in today for Tony Harris.

It's lunchtime at the president's health care summit where Democrats and Republicans struggle to find a way forward on health care reform.

It is 1:40 in the Northeast, where the fourth big snowstorm of the month is making it February to remember.

And at Florida's Sea World where all whale shows are canceled today after the death of a trainer.

All right. Orlando's Sea World is re-evaluating safety procedures after a killer whale killed again. It happened in front of a horrified audience. Eyewitnesses say the veteran trainer was dragged underwater without warning. CNN's Randi Kaye tells why the park has kept the giant orca despite its involvement in two other deaths.

(BEGIN VIDEOTAPE)

RANDI KAYE, CNN CORRESPONDENT (voice-over): She never had a chance, a 40-year-old female trainer in the jaws of a 22-foot-long killer whale, a massive orca weighing 12,300 pounds.

JIM SOLOMON, SPOKESPERSON, ORANGE COUNTY SHERIFF'S OFFICE: She apparently slipped or fell into the tank and was fatally injured by one of the whales.

KAYE: It happened at about 2:00 this afternoon at SeaWorld in Orlando, Florida, but exactly what happened is still unclear. SeaWorld says senior trainer Dawn Brancheau, who was interviewed on CNN two years ago, slipped into the tank. But an eyewitness tells CNN the killer whale, a bull orca named Tilikum, actually grabbed the trainer and pulled her into the tank.

VICTORIA BINIAK, EYEWITNESS: There was a trainer standing near by the window, just talking about the whale, and people were asking questions, how much does he weigh, things like that. And then the whale, like, floated upside down. And the trainer downstairs said, oh, yes, he is -- they are giving him a belly rub. He really likes that. And I could tell it was Tilikum, because you could tell by the fins.

KAYE: The whale is believed to be the largest orca in captivity. His fins alone measure more than six feet. The eyewitness says, when the trainer, who was not in the water, gave the go-ahead, the whale took off.

BINIAK: Just took off really fast, and then he came back around to the glass, jumped up, and grabbed the trainer by the waist, and started shaking her violently. And her shoe -- the last thing we saw was her shoe floating. And then sirens immediately started.

KAYE: The crowd that had gathered for the show was cleared out. The park manager at SeaWorld says the trainer drowned.

(on camera): An expert with the orca network who studies whales tells me Tilikum has always been known to be aggressive and doesn't swim with other trainers. He told me Tilikum's role in the SeaWorld show is simply to splash and soak the audience, using his massive tail.

(voice-over): Orca Network's Howard Garrett says the whale's lack of companionship may have triggered this attack.

HOWARD GARRETT, CO-FOUNDER, ORCA NETWORK: When you put a highly social mammal like an orca into captivity for long periods, they have nothing. They have no stimulation. They have no companionship. And that can tend to create stress.

DAN BROWN, PARK MANAGER, SEAWORLD: We have never, in the history of our parks, experienced an incident like this.

KAYE (on camera): But this is not the first time this killer whale has been involved in death of a trainer. Back in 1991, nearly 20 years ago, Tilikum and two other whales killed their trainer at a park in British Columbia in front of a crowd. She had fallen into the tank, and the whales dragged her under water.

(voice-over): Eight years later, in 1999, the naked body of a man was found floating in Tilikum's tank. He had snuck into SeaWorld. Authorities said he was the victim of horseplay.

Could it be that Tilikum, the killer whale, was looking to horse around this time, too?

BILLY HURLEY, SENIOR VICE PRESIDENT AND CHIEF ANIMAL OFFICER OF HUSBANDRY, GEORGIA AQUARIUM: Unlike your dog at home, who will just scratch your leg, if a killer whale wants to play with you, he's only going to show it to you one way, and, in this case, it is to pull you in the water. KAYE: No matter what Tilikum has done, the Orca Network believes SeaWorld will keep him. As the primary breeding male for all SeaWorld parks, he is worth millions.

At a time when whales are dying faster than they are being born, the Orca Network says Tilikum is SeaWorld's future.

Randi Kaye, CNN, New York.

(END VIDEOTAPE)

WHITFIELD: Heavy snow, brutal winds, and bone-chilling cold. The Northeast is getting another winter punch. Chad Myers is tracking the other big storm in the CNN Weather Center.

MYERS: And it wants to sit just offshore and dump snow literally for days.

WHITFIELD: Oh, boy.

(WEATHER REPORT)

WHITFIELD: Wow, it will be gorgeous, but it makes for very difficult transit.

MYERS: Depends on your age.

WHITFIELD: Yes, true.

MYERS: If you're 6, it's awesome.

WHITFIELD: You love it!

MYERS: If you're 46 trying to go to work, not so good.

WHITFIELD: All right, Chad Myers, thanks so much.

MYERS: You're welcome.

WHITFIELD: All right more charges today against two suspects in a plot to bomb New York City subways last September. Two friends of this man, Najibullah Zazi, now face conspiracy to use weapons of mass destruction and other charges. (INAUDIBLE) were indicted last month and pleaded not guilty. They are accused of traveling with Zazi to Pakistan in 2008. Zazi admitted Monday he got terrorism training in the trip.

In southern Afghanistan, a sign of success in the battle against the Taliban. The governor of Helmand province has raised the Afghan flag in Marjah. That city has been a major Taliban stronghold and at the center of a new offensive against a new terror group. The region borders Pakistan.

The offensive is the biggest in Afghanistan since the U.S.-led invasion in 2001.

And Toyota president Akio Toyoda called it "a tough day." He testified before a House committee about his company's recalls, apologizing for defects and laying out measures to ensure quality control and safety. Later, Toyoda choked up while thanking a group of dealers for their support.

(BEGIN VIDEO CLIP)

AKIO TOYODA, PRESIDENT OF TOYOTA: You and (INAUDIBLE) across America, around the world, you were there with me -

(APPLAUSE) TOYODA: You are present and encouraging and inspiring. Words cannot express my gratitude, but please accept this simple phrase: thank you very much.

(END VIDEO CLIP)

WHITFIELD: All of the thanks, apologies and promises are not enough. Toyoda now has to win back customer trust. CNN's senior correspondent Allan Chernoff has that.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: When the chief executive of Akio Toyoda which had been revered for quality confesses to losing sight of safety, it's a concern to all drivers. Toyota says his company was thinking too much about expansion and not about safe cars.

AKIO TOYODA, TOYOTA PRESIDENT: These priorities became confused. I intend to farther improve on the quality of the vehicles.

CHERNOFF: But promises may not be enough for Toyota owners who are shaken by reports of runaway cars especially when the company's U.S. sales chief says that recalls may not solve the problem.

REP. HENRY WAXMAN (D), CALIFORNIA: Do you believe that the recall of the carpet changes and the recall on the sticky pedal will solve the problem of sudden, unintended acceleration? UNIDENTIFIED MALE: Not totally.

CHERNOFF: Matt drives one of the luxury vehicles, a Lexus.

UNIDENTIFIED FEMALE: What other car can I get? Will I trust Toyota?

UNIDENTIFIED MALE: Do you?

UNIDENTIFIED FEMALE: No, I don't trust them.

UNIDENTIFIED MALE: Would you buy a Toyota for yourself now?

UNIDENTIFIED MALE: Not now.

CHERNOFF: It's a crisis for the Japanese auto maker.

UNIDENTIFIED MALE: The company is badly damaged. The brand is being damaged also.

CHERNOFF: Toyota dealers say the vast majority of customers are loyal to the brand.

UNIDENTIFIED MALE: 95 percent I would say have been positive. They have owned Toyotas before and are not worried.

CHERNOFF: But Toyota dealers are worried and offers rebates and low financing hoping to hold on to customers. Last month Toyota's U.S. sales slumped 16 percent as the auto market rebounded. And now competing auto dealers are going all out to grab more Toyota customers.

(on camera): Consultancy Brand Finance ranks Toyota as the ninth most valuable brand in the world, but says if the company fails to solve the sudden acceleration problem, consumers could turn on Toyota. The brand could lose about one-third its value in the next year.

Toyota is apologizing, but sorry is not going to be enough if the problem is not fixed. It is performance and not promises, that will work for the American consumer.

Allan Chernoff, CNN, New York.

(END VIDEOTAPE)

WHITFIELD: Working to reform the nation's health care system. President Obama and a group of lawmakers from both sides of the aisle are about to resume an unprecedented summit. They are discussing health care costs, coverage and regulation. CNN takes you back to live coverage right after this.

(COMMERCIAL BREAK)

BLITZER: All right. These are live pictures from inside Blair House. You see Republican and Democratic leaders. They are gathered back inside of the president still over at the White House. He will be walking across the street, walking across Pennsylvania Avenue to resume part two of this historic summit, and in fact, here is the president. These are live pictures of the president walking down from the White House.

You will be seeing him shortly crossing Pennsylvania Avenue. I suspect he won't stop and chat with reporters on the way back into Blair House as he did out of Blair House for this lunch break. It was a lively, substantive discussion. Let's hear it.

All right. Somebody shouted, did it go well? And he said absolutely. Someone said, that is what we want to hear, if you could not make it out. The president, as you will see, is going to leave the White House compound and go across the street to the Blair House, which if you don't know is the official (INAUDIBLE) foreign dignitaries, special guests who come to Washington.

There, he is going out of the northwest gate of the White House. He will be walking across the street. As we watch what is unfolding, John King is here together with the Best Political Team on Television. Let's listen for a moment, John, as he crosses the street.

OBAMA: Interesting discussion.

UNIDENTIFIED FEMALE: What did you have for lunch?

OBAMA: Chicken.

(LAUGHTER)

BLITZER: I don't know if we should read too much into that, John. He was asked what he had for lunch and he said chicken. That is a nice healthy lunch for the president, a little protein.

KING: A little protein, some energy for the afternoon discussion. We are talking about how remarkable this day and this scene is. The table in the Blair House, and these people who are fierce critics of each other on economic policies, health care policies. All of these people with high stakes for election year.

And that outside scene, Wolf, as you know from your years covering the White House, remarkable scene as well. It is very rare that we see the president just walking the grounds. Sometimes you will see him in the driveway inside the complex, going from the White House to what is now the Eisenhower executive building, but you rarely see the president leave the house and go out and walk on the streets, and that's actually refreshing.

There is -- I'm not sure what the extra security measures today. I'm sure they are out there watching, but as you know, pedestrians can walk through there. No car traffic anymore, but pedestrians walk through there. it is one of the things that is missed in this town. And the president himself says he misses in his life is normal interaction with everyday Americans, going to the store, doing something like that. Now, you see him chatting up, I believe that's Senator...

BLITZER: With Lamar Alexander who had that nice exchange on costs of the health care reform legislation if it were to be enacted. I don't know if we can make out what they are saying, but let's listen very closely to see if the microphones can pick this up.

(INAUDIBLE)

BLITZER: Unfortunately, the microphones are good, but not that good. We can't pick it up. At least my hearing is not as good as potentially it should be. But you see Tom Coburn there in the background and Lamar Alexander. They kicked the discussion off for the Republicans. And David Gergen, I thought, they both did a very strong job in making their respective cases.

GERGEN: That is the most animated I have ever seen Lamar Alexander in a public speech.